Every January 1st it starts, the numerous ads for tax preparation services reminding us that by the end of the month we’ll have our tax forms and that we only have until April 15th to file our taxes. So each year the question arises, do I do my own taxes or do I let a professional handle it? The answer is never simple and it always depends on what you want to gain from filing your taxes. Do you want it to be over and done with as soon as possible or do you want to get the most money possible? Do you want to learn more about the tax system on your own or is it just too complicated to care? Every person is different about what they want when it comes to filing taxes, so below are some benefits to both doing your own taxes or having a professional do it for you…
DOING YOUR OWN TAXES
* You get to learn how the tax system works. Once you start doing your own taxes, you start to understand how complicated the US tax system is. You learn what a W2, 1099, 1099-MISC, 5498, 1098, K1, 1040, 8582 and Schedule-E all mean and with that knowledge over the years comes the ability to optimize your own taxes.
* You get to learn about your own financial picture. Given you now have a better understanding of how the tax system works, you start thinking about your own finances in a different way. You adjust your own finances in accordance with what the government encourages all Americans to do i.e. buy a home and start a business.
* The IRS people are helpful & kind. Contrary to what you read in the movies about mean, terrible IRS agents crushing people’s lives, the folks at the IRS are actually pretty supportive. Why is this one would think? The main reason is because they know the tax system is so ridiculously complicated that even the most mathematically inclined of us are bound to make a mistake. The IRS is not out there to punish normal folks; they do want to help.
HIRING A PROFESSIONAL TO DO YOUR TAXES
* You truly hate numbers. If numbers make you cringe then definitely don’t do your own taxes. It’s easy to mess up your taxes if you are not extremely careful. Errors can cost you much more than what a mistake free tax return will cost you.
* You already have a truly great accountant. If you have a rock-star accountant who is on the same page with you in terms of tax philosophy, you might as well have him or her do your taxes for you. A good tax accountant can and most assuredly WILL find you every single dollar you have coming to you that you didn’t even know existed. This is by far the BEST reason to hire a professional; they know a LOT that you don’t and they know exactly what you can claim and what you can’t. Plus, most have audit guarantees and will work with you at no extra cost if you get audited.
* You have a plethora of investments and income streams. If you have 7 rental properties, 4 vacation homes, 3 different private investments, annuities, dividends, a couple of side business and make multi-millions, then you definitely want to have a seasoned professional do your taxes. It gets too complicated for most and chances are if you have all of that, you don’t have the hours it will take to work out all of that on your own.
* You don’t enjoy reviewing the work you’ve just done. If you were the type in school who took your final exam and just handed it in without stopping to review your answers thoroughly, then you want to hire an accountant. Most people just want to file their taxes without getting audited and get some extra cash to start the year with; if this is you then hire a professional.
For more information on the benefits of hiring a tax professional, speak with a Beaton Accounting tax representative for professional advice! Call today for a FREE consultation: 631-921-6894.
Have a question or certain topic you’d like to see addressed in our next blog post? Just leave a comment, or e-mail us at [email protected].